Foreign exchange loss

For increase in forex rate, entry would be - 

Forex Loss (PL) Dr.

Creditors Cr.

For decrease in forex rate, reverse entry will be passed

sir

it increases our creditor balance . hopw to adjust

Pls provide complete details.

If the forex rate has increased, you need to pay more in INR terms but in foreign currency terms it will be same.

loss in fluctuation          inr 15000                   dr

to abc ..........                                         inr 15000   cr

Tripta...lets say amount payable is USD 10,000. 

Exchange rate at the time of bill booking is 66 and now it is 68.

You will book a loss of 10000 X 2 = 20000 Rs.

And increase creditors in INR terms by Rs. 20000

You need to pay only USD 10000 at the time of payment

Lets say u make the payment at rate of 69

Then you will again book a loss of 10000 X ( 69 - 68 )

Increase creditors by 10000X 1 = 10000 Rs.

And will show the payment of 10000 * 69 = Rs 69000

In this way your creditor will be zero

Hope this clarifies.